B. Common Area Repair Works Interest-free Loan
In addition to the Common Area Repair Works Subsidy, the Government provides an interest-free loan to owners to encourage comprehensive maintenance works to the common areas of buildings.
The Loan is applicable to owners of private residential or composite (i.e. commercial and residential) buildings at least 20 years old. One further criterion is that the average rateable value per residential unit in the building must not exceed $120,000 per annum for properties in the urban area (including Shatin, Kwai Tsing, Tsuen Wan) or $92,000 per annum for properties in the New Territories.
Buildings with or without an owners’ corporation
For buildings with an owners’ corporation, the management committee has to pass a resolution resolving to apply for the Common Area Repair Works Interest-free Loan and to authorize a representative to sign the relevant documents.
For buildings without an owners’ corporation, the Government considers applications from owners on a case-by-case basis. Generally speaking, the owners of units in the building should hold a meeting to resolve to apply for the Loan and to authorize at least two representatives to sign the relevant documents.
Once the government gives its approval-in-principle for the Loan, the individual owners in the subject building should submit their individual loan applications. It should be noted that applicants have to be the registered owners of the residential property for which the loan relates. They have to be individuals, not company owners. Although there is no income and assets means test, applicants are required to produce proof of income (such as salary slips) to prove their repayment ability; otherwise, they will be required to execute a legal charge in favour of the Government.
Use of the Loan
The Common Area Repair Works Interest-free Loan is to be applied to common areas works relating to structural safety, sanitary facilities and environmental friendly provisions.
The maximum loan amount for an individual owner of a residential unit is $100,000 or the full cost of the owner’s contribution to the common area repair works, whichever is lower. The Loan has to be repaid over a period of not more than 60 months.